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Hi anyone here who is trading on emin while stock market opening? What you guys look for on tape in this time? I'm start trading on tape and i wonder is the spread wider while there is stop hunt?
Can you help answer these questions from other members on NexusFi?
Spreads are usually tight (1-2 ticks) on the ES. However, levels move too rapidly for a human to generally react and market orders can appear to have slippage from your point of view because you are simply too slow. Better to get in with server-side limit orders that you can update quickly. It is generally a good idea to wait 10-15 minutes for the initial madness to cool off. Good luck!
I have found it a very good idea to not try to trade for the first 5 minutes -- sometimes 10 -- after the open. It may look good if you view it in hindsight after the fact, but while it is whipping around, it is very hard to keep your perspective and it is also almost impossible to consistently respond appropriately to the whipiness ("madness" is a good term for it.) You also don't need to. The market gets much more tradable as things settle down, in my experience anyway, and conditions become much more what I am expecting and can respond to.
Of course, we also read about traders who trade the initial period and do well with it. But I am happy to wait. The market is open all day.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Price action/order flow is at it's most pure at price extremes (major swing highs/lows), after major news announcements where the news/economic reading is a surprise and has not been priced in (e.g. a PPI/CPI/non farm payroll, surprise invasion etcetc) and finally....the open.
A 1 minute chart can lack real detail.
I trade the open using a 10 sec and 2 sec chart whilst looking briefly at 1 min/5 min/15 kin chart for context.
Look to trade with a floor of beaten sellers below you if going long and vice versa.
1 minute after the open, a cup and saucer pattern on the 2 sec chart that shows large volume has transacted on the left hand side on an move lower(just look at normal volume indicator nothing fancy required) is going to give you a long. It'll be quick but it will move higher on most occasions. How far is another matter but these are very high % winning trades.
It's important to note that this 2/10 sec trading routine should only be used at times of high market volatility.
Price action repeats itself again and again across all timeframes. Zoom out a 1 hour chart and.mark out S/R levels to trade at. Do the same with a 1 min chart. The set ups are the same, it's just that the frequency is different.
Note that trading on the 2/10 sec chart requires NO CONFIRMATION. That 2/3 point confirmation candle might be the actual move.
"1 minute after the open, a cup and saucer pattern on the 2 sec chart that shows large volume has transacted on the left hand side on an move lower(just look at normal volume indicator nothing fancy required) is going to give you a long. It'll be quick but it will move higher on most occasions. How far is another matter but these are very high % winning trades."
I really want to know more about this. It seems the big news events burn me as the price drops through my stop within a minute of my order filling. I feel it may be better to short the jumps at this rate.
One youtube trader follows the price with a 5 and 13 min SMA and buying when it dips down to the 5 if you are high confidence and 13 to keep in the trade.
There are an unlimited number of ways to make money trading. You need to find the way or ways that work well with your personality. Trading the first minute, or the first five minutes, or not trading the first five minutes, all can work. But you need to have a plan. (“Plans are useless but planning is essential.”)
If you think you might be interested in and well suited for trading the open, the first thing you will notice about your plan is that it will not trigger every day. There will be days when the market does not give you what you are looking for.
The second thing your plan will make obvious is that sometimes the trades will lose money. You won’t have a 100% win rate. Now, intellectually it is very easy to accept that trades have a risk/reward ratio and a percentage chance of winning vs losing. The important thing is to accept that emotionally. When you enter that trade 1 minute after the open and 90 seconds later you are stopped out, how do you react??? Your plan should tell you what to do. At the open the market is moving extremely quickly and your trading devil will tempt you to get back in. What does the plan say? You must develop enough confidence in the long term wisdom of the plan that you resist the temptation to deviate from it, take a flyer, declare “special circumstances” etc even when it’s coming up tails five, six and seven times in a row.
For example, I do not necessarily trade “the open” and I probably have bigger stops, targets and holding periods than most who do. But I do have a rule that says if I take an early trade, if it gets stopped, I wait for the first half hour to be over before looking for the next setup. In the first 30 minutes the market can go directional, and if your trade was in the wrong direction it is tempting to get in a battle because… on the days when the market is not directional in the first 30 minutes it often makes a new high of the day and new low of the day a few times, which is a recipe to chop up over eager traders.
Your plan should also account for “where” the market is opening. Most gaps fill, and many of the small ones fill relatively early in the session. What if you gap outside of yesterday’s range? Will you play that for continuation of for reversion? Be consistent. How about opening inside or outside of yesterday’s value? Will that matter to you? Will you play for, or react to, breaking the overnight high or low very early in the day? Again, have a plan that is consistent. If you buy the overnight low when it trades in the first 5 minutes, for example, don’t sell it today because the last 3 trades stopped.
And part of your plan can always be, if the market is too volatile (like these CPI days with a hundred points of range between 8:30 and 9:30) or not volatile enough (a late summer Monday, for example), then there’s no trading at the open. Remember your plan does not only aim to put you in good trades, it also aims, maybe more importantly, to keep you out of bad ones.
News trading is a similar concept than trading the open.
Actually it's an even better concept than trading the open because if the news is a surprise then then you can use the 2 sec (or tick chart for more detail) to see these extremely fast M/W patterns with left shoulder volume activity.
News trading requires much wider stops, and if you're looking at a 1 min chart then you're not really getting any detail on what's really happening.
anyone thinking of trading the open using just the dome should rethink the idea . to trade the open it will be necessary to have the knowledge of how to trade opening gaps in real time , I D the opening type in real time ( opening drive ..openinging test drive .. open auction .. open auction reversal ) the effects of overnight inventor in real time , how price reacts to key reverence from the past few days trading , the concepts of balance , imbalance , acceptances , and rejection in real time , how to use market breath indicators in real time and what key reference points from the past few days are the most import ones based on overall market conditions . without that knowledge combined with screentime it is very likely you will crash and burn no mater what holy grail order flow software is being used . hope it helps
I use the order book to trade the open without charts. I try to reduce my risk as much as possible. As others have said from 9:30 to 9:45 price can jump 4 ticks(and more) in an instant and this is just to volatile for me. I watch the DOM to determine when the market has calmed down and price has stopped jumping like crazy. Once stable bids and offers come into the order book I start thinking about getting into a position. I also try to have an exit plan before I get in so a loss does not get out of hand. I have been in the "let me wait and see how this acts" side of things many times during open with disastrous results, losing large chunks of my account in the process. I like using a hard stop order because my eyes and hand can not react fast enough to get out when the price jumps against me.
